Register Star offers buyouts to employees

The Rockford Register Star will offer voluntary severance packages to its core newspaper staff, a move designed to reduce the newspaper staff by 20 to 25 positions.

Linda Grist Cunningham

The Rockford Register Star will offer voluntary severance packages to its core newspaper staff, a move designed to reduce the newspaper staff by 20 to 25 positions.

The buyouts announced today, which are believed to be the first such staff reductions at the newspaper in its history, would bring staff costs to 94 percent of 2007 costs.
“It is a challenging time for us and the newspaper industry” Fritz Jacobi, president and publisher, told the newspaper staff at a meeting this afternoon. “We have done a number of things over the past couple of years to be more efficient and to stay focused on efforts to move our business forward.”

Jacobi said the newspaper’s “portfolio approach” of launching highly successful magazines and online sites helped soften the potential reductions at the core newspaper.

He pointed to increased revenue streams from commercial printing with the new press, from circulation price increases and from very successful magazines, such as Rockford Woman and BusinessRockford.com. He also said HealthyRockford.com, which launches April 29, would generate new revenue.

The newspaper froze positions when it could and restructured departments to improve efficiency and increase productivity. It added new systems that helped it work more efficiently and it cut expenses.

“In the past, these kinds of measures have worked well and we avoided staff reductions,” he said. “This time, they simply are not enough.”

The newspaper has 409 employees. The voluntary severance packages are being offered in all departments, and employees will have up to 21 days to consider the buyouts. Not all employees who apply for a buyout may be accepted; final choices will be based on the needs of the newspaper to maintain its core operations.

Staff supporting other products in the portfolio, including the magazines and online development, are not affected.

The package includes a one-week-per-year-of-service payout and continuation of medical benefits through the payout period. The maximum payout is 26 weeks.
“The Rock River Valley economy over the past three months has gotten much worse much faster than we anticipated,” Jacobi said, “and, there is no prediction it will improve this year. Revenue in the core newspaper has declined and costs for newsprint, utilities, health insurance and benefits have risen.”

Unlike other newspapers around the country, the Register Star has avoided large-scale staff reductions, and this will be its first in memory. Newspapers around the country, including The New York Times, the Chicago Tribune and The Washington Post, have turned to staff reductions over the past three years to reduce core newspaper payrolls.

“Our ability to work smarter, increase revenue and cut expenses will soften the blow here, but cannot eliminate it,” Jacobi said. “We’ve run out of rabbits to pull out of our hat.”

Jacobi acknowledged that there will be speculation the staff reduction is a result of the newspaper’s purchase in May by GateHouse Media after 40 years of Gannett Co. ownership.

“I know that will be the conversation,” he told the staff, “and it’s understandable, but it is simply not true. We have always managed our operations ahead of the market’s economic conditions. We are doing so again. And, from my years with Gannett, I am comfortable saying that, were we still owned by them, we would have had to make these cuts last year.”

Jacobi stressed the economic and financial viability of the Register Star, and his optimism that by 2009 the local economy would stabilize.

“I want to be clear: We are a profitable business, in fact one of the most profitable in the GateHouse newspaper group. However, our profits are getting smaller, and our costs are going higher. Just last month, newspaper mills announced newsprint price increases that increase our newsprint costs by 20 percent. We need to take actions to stabilize our profits.

“And that means we will maintain our commitment to local news coverage in the core newspaper, our service to our advertisers and our customers. At the same time, we will increase our commitment to our new products in the portfolio, including our magazines and our Web sites.”

Executive Editor Linda Grist Cunningham can be reached at lgcunningham@rrstar.com or 815-987-1355.